Shaul Ben-David

Voluntary provision of public goods: The multiple unit case☆

Abstract This paper reports the results of a series of experiments designed to test the predictions of a model of voluntary provision of public goods through private contributions. The particular voluntary contribution game implements the core in successively undominated perfect equilibria, but the behavioral question is whether the agents adopt strategies which support this refinement to the Nash equilibrium. The experimental evidence suggests that they do not: core allocations do not consistently occur in the laboratory markets.

Improving the contingent valuation method: Implementing the contribution game

Abstract This paper reports the use of laboratory experiments to investigate the properties of a public good provision mechanism as it is employed to elicit individual measures of willingness to pay for a collective good. The major finding is that contingent valuation method surveys based on the contribution game mechanism are incentive compatible, thereby reducing strategic bias; permit the use of open-ended valuation questions, avoiding the statistical problems encountered when using truncated data and the potential problems associated with focal price effects; and encourage the investigator to supply considerable information concerning the public good and the users (including potential users), overcoming many of the cognitive limitation problems noted in the literature. The contribution game setting is not capable of generating a completely bias-free data set. However, the design is capable of producing an identifiable subset of the data that is not biased. These results show that the received sentiment against the use of biased survey data may be misplaced when one is able to identify a subset of the data that is not biased. This paper is, to our knowledge, the first to demonstrate, by example, that zero-mean error predictions can be obtained by systematically choosing a subset of observations from biased data rather than by the traditional econometric approach of transforming the entire set of values.

Passive and active residential solar heating: A comparative economic analysis of select designs

This paper compares four passive solar heating concepts to a conventional air collector/rock storage system. Masonry (Trombe) and water walls are considered in the presence and absence of night insulation. The performance of optimally sized systems is evaluated on a state-by-state basis. The effects of low interest loans and National Energy Act (NBA) income tax credits are examined. With natural gas as the alternative fuel, the passive designs evaluated here offer more promise than the active system. This is true with or without inclusion of incentives, although either incentive option enhances economic performance. The passive designs evaluated in this paper are economically competitive against the electric resistance alternative in all but a few states. Moreover, on a life cycle cost basis, these designs are feasible today. Although the optimal solar fractions are generally low, passive designs offer the opportunity to incorporate solar heating into a new home at costs much less than their active counterparts. This is because there are no discernible fixed costs, thereby allowing a simple movement from zero to 100% solar when evaluating economic feasibility. When both active and passive design are shown to be cost competitive against alternative fuels, higher solar fractions will be associated with the active systems. This is principally due to the substantial fixed cost component of active systems, which forces one to achieve a given solar fraction before economic feasibility can be shown.

Should we try to predict the next great U.S. earthquake

Abstract Short term earthquake prediction has become technically possible. However, the desirability of such predictions depends both on the probability of successfully predicting an event and on the odds of false predictions. This paper investigates the economic feasibility of earthquake prediction as a function of program performance for the Los Angeles area. Based on the now increasing probability of a great earthquake in the region, the paper concludes that, given current best estimates of program performance, such predictions may well provide expected benefits which exceed expected casts.

Rationing supply capacity shocks: A laboratory comparison of second best mechanisms

This chapter compares four methods of rationing an input that is subject to supply capacity shocks. We describe the application of the mechanisms in terms of electricity. The mechanisms we test are random interruption, priority service, proportional service%all option and proportional service/put option. None of the mechanisms, as implemented, are first-best but can be ranked by their theoretical allocative efficiency. According to the theory, both versions of proportional service should produce the highest allocative efficiency whereas random interruption ranks lowest. In the laboratory, the two proportional mechanisms have radically different behavioral properties. The proportional/put option mechanism performed as predicted by theory. In spite of its theoretical superiority to random interruption and priority service, the proportional/call option mechanism performed no better than random interruption in the laboratory.

IMPACTS OF THE NATIONAL ENERGY PLAN ON SOLAR ECONOMICS

ABSTRACT The National Energy Plan (NEP) sets as a goal the use of solar energy in two and a half million homes in 1985. A key provision of the NEP (as well as congressional alternatives) provides for the subsidization of solar equipment. The extent to which these subsidies (income tax credits) might offset the impact of continued energy price control is examined. Regional prices and availability of conventional energy sources (oil, gas, and electricity) were compiled to obtain a current and consistent set of energy prices by state and energy type. These prices are converted into equivalent terms (

Economic benefits of preserving visibility in the national parklands of the Southwest

10 6 Btu) that account for combustion and heat generation efficiencies. Projections of conventional fuel price increases (or decreases) are made under both the NEP scenario and a projected scenario where all wellhead price controls are removed on natural gas and crude oil production. The economic feasibility (life cycle cost basis) of solar energy for residential space heating and domestic hot water is examined on a state-by-state basis. Solar system costs are developed for each state by fraction of Btu heating load provided. The total number of homes, projected energy savings, and sensitivity to heating loads, alternative energy costs and prices are included in the analysis.